Progress for a medical mart in Cleveland remains a mystery

Plain Dealer fileTower City Center's land along the Cuyahoga River should be the site of a new convention center, according to a civic committee. But Tower City's owners say no one has talked to them about the mart in months.

The owners of Tower City, the site favored by a selection committee for the medical mart, say that no one has talked to them in months.

Taxpayers have provided $100,000 so far to the county's chief negotiator, lawyer Fred Nance, but his legal bills provide no clue about whom he is negotiating with or how long he is talking with them.

And even though county commissioners have set a Jan. 15 deadline for making a deal to manage the project with Merchandise Mart Properties Inc., Nance won't commit to the date.

What's not a secret is how much taxpayers have contributed to the project so far through an increased sales tax: $42 million and counting.

"I can't find out what's going on like you can't find out what's going on," said David LaRue, president and chief operating officer of Forest City's commercial group. Forest City owns Tower City.

In August a committee of business leaders recommended Tower City over the site of the current city convention center as the best place for the $1 billion project that is expected to be a major boost to the region's economy.

Forest City officials anticipated the decision would lead to an immediate string of conversations involving them, county officials and Merchandise Mart Properties to lock up the land. Instead, Forest City's brass have been largely ignored as no visible progress has been made on the project and now a new year beckons.

County commissioners added to the anxiety by setting the mid-January deadline as progress was going too slow even for them.

LaRue said his company last talked with an MMPI official two months ago. He said he asked, "Where are we in the process? How come we're not having discussions?"

He said he is still waiting on answers.

One reason Forest City remains in the dark is that discussions between county leaders and MMPI are done in private. So are Nance's briefings of county leaders. His bills to the county provide little insight. Nance's paperwork summarizes only a few general tasks he agreed to perform 14 months ago, when he began working for the county on the project. The county's contract with Nance could net him and his firm, Squire Sanders & Dempsey, an additional $75,000.

County Administrator James McCafferty said that commissioners are pleased with Nance's work and that he is putting in considerable hours.

The privacy helped mask another reason Forest City is in the dark. MMPI is conducting its own site selection study, largely to find ways to reduce construction costs. As part of that look, MMPI examined a third location -- a spot in the Flats -- although the remoteness of that land may doom it.

Mark Falanga, senior vice president of Chicago-based MMPI, said the company has made numerous cost analyses based on different design sizes. He said the project's complexity has made progress slow. He said MMPI will not pick a site just to meet a deadline.

"This has been largely an internal process," Falanga said. "When we are ready to share results, we will be happy to do so."

Still, county officials remain confident the Jan. 15 deadline will be met.

County Commissioner Tim Hagan said LaRue is overreacting.

Hagan said negotiations to buy land won't start until after the development agreement is reached with MMPI. The deal would outline the company's obligations, such as responsibility for cost overruns, and financing. It already has been decided that MMPI will build and operate the medical mart and convention center.

The county will pay for the bulk of the complex with money from the sales tax increase that went into effect in October 2007. The quarter-cent tax increase is to run for 20 years. In the first full year, it generated $42 million. Although tax collections eventually could total $1 billion, the tax money is expected to cover only up to $500 million in construction costs. The rest will pay down debt.

The business leaders' site selection report estimated construction and land acquisition costs at Tower City at $536 million. Work at the current convention center, off Lakeside Avenue, was figured at $583 million.

Falanga said MMPI wants to limit those costs to $400 million.

LaRue said he is concerned the size of the complex is being shrunk so it can fit into the convention center site for the same price as building at Tower City. If that's the case, he said, MMPI should approach him about reducing the size at his site.

If Tower City is chosen, the medical mart would be housed in the Higbee Building, and the convention center would be built behind Tower City. At the existing convention center site, the building would be demolished and replaced by a structure for the mart and convention center.

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